Pissarides: A Cyprus exit from the Eurozone is not a solution

A Cyprus exit from the Eurozone or the exit of any other member state facing problems is not a solution and instead all the Eurozone members should join forces to strengthen the foundations of the Euro, Christopher Pissarides, winner of the 2010 Noble Prize in Economics has stressed.

Delivering a speech at the 2nd Scientific Conference organized by the Tassos Papadopoulos Centre for Studies, titled “Cyprus: Five Years in the Eurozone”, Pissarides said that the exit of Cyprus, or any other state currently under Memorandum with Troika, from the Eurozone, is not a solution for the Eurozone itself.
Pissarides said that the current situation is very unsatisfactory, stressing the need for a healthier future in Eurozone, which could be achieved by establishing a Banking union and a fiscal union.

After years of austerity and structural reforms, Europe needs new infrastructure programmes and new institutions, Pissarides said. He added that we need a fiscal Policy Council to monitor the fiscal budget in the Eurozone.
Moreover, the Labour Market needs to be flexible, especially in southern countries. As he explained, flexibility means more freedom of employers to run their business without too much regulation.

As regards the structural reforms, Pissarides said that they take at least three years to have an impact in the economy. As he added, Troika is right to ask reforms, but is wrong as regards the timing.
He also referred to the Single Market, saying that it is essential to complete the Single Market in terms of growth and job creation. Barriers have to be lifted in services in order to increase competitiveness and job creation, he said, adding that the future of growth is in a few hi-tech sectors, which drive the rest of the economy up.